Although no company likes to contemplate the idea of being sued or pursuing a lawsuit, it is often an inevitable part of the cost of doing business. When a dispute arises, an important first step is determining the deadline for filing a claim. This deadline is known as a “statute of limitations.” If an individual/company fails to file their claim by this deadline, the individual or company is barred from pursuing that specific claim.
Companies who may either litigate in Arizona or utilize Arizona law within their litigation should familiarize themselves with some of the most common statutes of limitation they may face, these statutes of limitation include:
Breach of Contract
A breach of contract circumstance arises when a party to a contract (either verbal or in writing) does not fulfil its responsibilities (monetarily or otherwise) to another party to the contract. The statute of limitations for oral breach of contract is three years and is governed by Ariz. Rev. Stat. Ann. Section 12-543(1). The statute is six years for written breach of contract under Section 12-548. The statute of limitations for breach of contract for a sale is four years. This deadline is governed by Sections 12-544(4) and 47-2725(A) of the Arizona Revised Statutes.
Breach of Fiduciary Duty
A fiduciary duty is a legal responsibility to act in the best interest of another person or organization, including a business. For example, a board of directors has a fiduciary duty to act in the best interest of its shareholders. In Arizona, the statute of limitations for breach of fiduciary duty is two years. These deadlines are outlined in Ariz. Rev. Stat. Ann. §12-542.
Breach of an Employment Contract or Wrongful Termination
A breach of an employment contract occurs when one party doesn’t live up to its end of the bargain. In the context of an employment contract, the employee claims he or she was fired or laid off before the term agreed to in the written contract, or for reasons not allowed by the contract. Usually hand-in-hand with a claim for breach of an employment contract is the claim of wrongful termination. Wrongful termination occurs when an employee is terminated from their employment for illegal reasons or if the termination of the employee violates company policy, an employment contract, or state statutes. In Arizona, the statute of limitations for these claims is one year. These deadlines are outlined in Ariz. Rev. Stat. Ann. §12-541(3) and (4).
Libel or Slander
Libel and slander are specific terms often included in the general term “defamation.” In basic terms, defamation requires a false statement, either oral or written, communicated to a third person that brings another into disrepute, contempt or ridicule or impeaches the person’s honesty, integrity, virtue, or reputation. Whether the action be considered libel, slander or a combination of both will depend on how the statement was relayed and the party relaying the statement. In Arizona, the statute of limitations for either libel or slander is one year. These deadlines are outlined in Ariz. Rev. Stat. Ann. §12-541(1).
Consumer Fraud
Like most states, Arizona has legislation in place that protects the public from deceptive business practices that prey upon consumers. In Arizona, a seller or advertiser of objects, wares, goods, commodities, intangibles, real estate, or services engages in “consumer fraud” when it suppresses, conceals, adds, or fails to disclose a material fact through deception, an unfair act or practice, a false statement, a false pretense, a false promise, or a misrepresentation. The statute of limitations for consumer fraud in Arizona is just one year and is found under Ariz. Rev. Stat. Ann. § 12-541(5).
Negligent Misrepresentation According to the Restatement of Torts (2d) § 552, negligent misrepresentation occurs when “one who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.” Under Section 12-542 of the Arizona Revised Statutes, the statute of limitations for this cause of action is two years.
